USD/CAD – Canadian Dollar Dips as Trump Threatens Tariffs

The Canadian dollar continues to head lower on Friday. Currently, USD/CAD is trading at 1.2910, up 0.23% on the day. On the release front, there are no Canadian events on the schedule. In the US, the focus is on durable goods reports, with expectations of mixed results. Core durable goods orders is expected to climb to 0.5%, but the markets are braced for a decline of 1.3% from durable good orders. The US will also release UoM Consumer Sentiment, is expected to remain unchanged at 98.8 points.

The Federal Reserve released the minutes from its May meeting. In the minutes, some Fed policymakers said they favored removing the phrase that “the stance of monetary policy remains accommodative”. Not surprisingly, the minutes didn’t shed light on the Fed’s plans, saying that another rate hike would occur “soon”, on the assumption that the US economy continues to perform as expected. Still, a quarter-point rate hike in August is virtually a given, with the CME Group setting the odds of a hike at 95 percent. This would mark a second hike in 2018. After that? The Fed projection remains at three rates hikes in 2018, but some analysts are predicting four increases this year.

USD/CAD Fundamentals

Thursday (May 24)

4:15 US FOMC Member William Dudley Speaks

8:30 Canadian Corporate Profits. Actual 2.7%

8:30 US Unemployment Claims. Estimate 220K. Actual 234K

9:00 US HPI. Estimate 0.5%. Actual 0.1%

10:00 US Existing Home Sales. Estimate 5.56M. Actual 5.42M

10:30 US Natural Gas Storage. Estimate 92B

10:35 US FOMC Member Rafael Bostic Speaks

Friday (May 25)

8:30 US Core Durable Goods Orders. Estimate 0.5%

8:30 US Durable Goods Orders. Estimate -1.3%

9:20 US Fed Chair Powell Speaks

10:00 US Revised UoM Consumer Sentiment. Estimate 98.8

10:00 US Revised UoM Inflation Expectations

11:45 US FOMC Member Rafael Bostic Speaks

*All release times are DST

*Key events are in bold

USD/CAD for Thursday, May 24, 2018

USD/CAD, May 24 at 10:20 DST

Open: 1.2835 High: 1.2920 Low: 1.2829 Close: 1.2894

USD/CAD Technical

S3

S2

S1

R1

R2

R3

1.2687

1.2757

1.2850

1.2943

1.3015

1.3125

USD/CAD was flat in the Asian session. The pair posted gains in European trade and continues to move higher in North American trade

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Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.

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